The consumer price index (CPI) rose for the second straight month, bringing the yearly inflation rate to 2.35 percent last month, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
While all seven sub-indexes rose across the board, economists and academics attributed the CPI’s growth to the low base effect and increased gasoline prices, saying there was no inflationary pressure.
“The major reason for the increased inflation rate was that fuel prices saw a yearly increase of 25.8 percent, contributing 0.17 percentage points to the growth,” DGBAS section chief Wu Chao-ming (吳昭明) told a media briefing.
The core CPI, which is used to track long-term inflation because it excludes volatile vegetable, fruit, fish and energy prices, grew 1.01 percent last month from a year earlier, snapping an eight-month contraction streak, Wu said.
DGBAS data showed that in the first two months of this year, the CPI rose 1.3 percent compared with the same period last year, with merchandise prices rising 3.28 percent.
“The economy is slowly regaining momentum and international raw material prices are rising, so consumer price hikes are inevitable, indicating growing demand,” Wu said. “But due to still severe labor market conditions, commodity prices will not likely increase greatly.”
The CPI rose 0.53 percent last month from January on increased food prices, babysitting charges, taxi fares and travel expenses because of the Lunar New Year holidays, the data showed.
The wholesale price index increased 5.87 percent year-on-year last month, down from 6.74 recorded in January, because of the increased prices of oil products and chemical materials, it said.
Cheng Cheng-mount (鄭貞茂), head economist at Citigroup Taiwan Inc, said by telephone that last month’s CPI growth didn’t indicate inflation because the increase was “reasonable” because the inflation rate contracted last year.
“After allowing for the Lunar New Year factors, the CPI’s growth [of more than 2 percent] is temporary,” Cheng said, adding that in the second half of the year the CPI was expected to rise by about 1 percent.
Yang Chia-yen (楊家彥), a director at the Taiwan Institute of Economic Research (台灣經濟研究院), said inflationary pressure was not a concern so far, but the government should remain on alert for it over the next few months.
“Compared with last year, gasoline prices increased last month, and the base effect should be taken into account as well,” Yang said by telephone, adding that the inflation rate should remain low in the third and fourth quarters.
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